This paper provides an introduction and “user guide” to Regression Discontinuity (RD) designs for empirical researchers. It presents the basic theory behind the research design, details when RD is likely to be valid or invalid given economic incentives, explains why it is considered a “quasi-experimental” design, and summarizes different ways (with their advantages and disadvantages) of estimating RD designs and the limitations of interpreting these estimates. Concepts are discussed using examples drawn from the growing body of empirical research using RD.

The magnitude of growth in “underlying” wage inequality in the United States during the 1980s is obscured by a concurrent decline in the federal minimum wage, which itself could cause an increase in observed wage inequality. This study uses regional variation in the relative level of the federal minimum wage to separately identify the impact of the minimum wage from nationwide growth in “latent” wage dispersion during the 1980s. The analysis suggests that the minimum wage can account for much of the rise in dispersion in the lower tail of the wage distribution, particularly for women.

Reviews the book "Managing Foreign Exchange Exposure," by Donald H. Drury and Vihang R. Errunza.

Economic impacts of unionization on employers are difficult to estimate in the absence of large, representative data on establishments with union status information. Estimates are also confounded by selection bias, because unions could organize at highly profitable enterprises that are more likely to grow and pay higher wages. Using multiple establishment-level data sets that represent establishments that faced organizing drives in the United States during 1984–1999, this paper uses a regression discontinuity design to estimate the impact of unionization on business survival, employment, output, productivity, and wages. Essentially, outcomes for employers where unions barely won the election (e.g., by one vote) are compared with those where the unions barely lost. The analysis finds small impacts on all outcomes that we examine; estimates for wages are close to zero. The evidence suggests that—at least in recent decades—the legal mandate that requires the employer to bargain with a certified union has had little economic impact on employers, because unions have been somewhat unsuccessful at securing significant wage gains.

We investigate how formularies used by pharmacy benefit managers (PBMs) affect equilibrium manufacturer rebates for branded drugs through tiering and exclusion. We develop a theoretical model of multidimensional contracting in which a PBM negotiates with drug manufacturers over menus of formulary‐contingent rebates and chooses a formulary. We then estimate consumer demand responses to tier placement for statins using claims data from Princeton University, a large employer contracting with a single PBM to offer prescription drug coverage to its employees. Combining the theoretical model with demand estimates and observed list prices, we quantify how allowing for differential tier placement and exclusion affect equilibrium rebates. Our predictions are consistent with available aggregate rebate data, and we find that allowing a PBM to place branded drugs on preferred‐ and non‐preferred tiers can substantially increase negotiated rebate payments.

P. K. Trivedi, B. M. S. Lee; Seasonal Variability in a Distributed Lag Model, The Review of Economic Studies, Volume 48, Issue 3, 1 July 1981, Pages 497–505, ht

We are pleased to introduce this volume of papers, all of which were presented at a conference in honor of JohnDiNardo held in Ann Arbor, Michigan, in September 2018. After battling leukemia for close to a decade, John left us on August 26, 2017, at the age of 56. The conference was an opportunity for colleagues, coauthors, students, and friends to celebrate John’s life and academic achievements. The proud son of Italian immigrants, John was born and raised in Allen Park, Michigan. He spent most of his academic career at his alma mater, the University of Michigan, where he earned an undergraduate degree and a masters of public policy. After completing his PhD at Princeton in 1990, John spent a year at the RAND Corporation before joining the faculty at the University of California, Irvine, in 1991. He moved back to Michigan in 2001, where he spent the remainder of his career. At this point, convention calls for a discussion of the main research contributions of the scholar being honored, followed by a summary of the contributed papers. However, following convention is not what best describes John DiNardo’s life and career. Armed with a trademark irreverence, a

This article examines how realized variances predict cryptocurrency returns in the cross section using intraday data. We find that cryptocurrencies with higher variances exhibit lower returns in subsequent weeks. Decomposing total variances into signed jump and jump-robust variances reveals that the negative predictability is attributable to positive jump and jump-robust variances. The negative pricing effect is more pronounced for smaller cryptocurrencies with lower prices, less liquidity, more retail trading activities, and more positive sentiment. Our results suggest that cryptocurrency markets are unique because retail investors and preferences for lottery-like payoffs play important roles in the partial variance effects.

We investigate the welfare effects of vertical integration of regional sports networks (RSNs) with programming distributors in U.S. multichannel television markets. Vertical integration can enhance efficiency by reducing double marginalization and increasing carriage of channels, but can also harm welfare due to foreclosure and incentives to raise rivals' costs. We estimate a structural model of viewership, subscription, distributor pricing, and affiliate fee bargaining using a rich data set on the U.S. cable and satellite television industry (2000?2010). We use these estimates to analyze the impact of simulated vertical mergers and divestitures of RSNs on competition and welfare, and examine the efficacy of regulatory policies introduced by the U.S. Federal Communications Commission to address competition concerns in this industry.